Cluttons has released its Muscat Property Market Outlook report for Spring 2018, suggesting that Oman’s economy is improving thanks to tourism and oil prices.

SuzyT via Pixabay

Oman’s economy is projected to grow by 3.6% in 2018, according to Cluttons' latest Oman report

Buoyed by higher oil prices and growing tourism, Oman’s economy is recovering well from the lows of 2016, and is projected to grow by 3.6% in 2018, according to Cluttons' latest Oman report. If sustained in the longer term, this growth is expected to have positive impacts across the Sultanate’s property market.

The report says that the government’s strong push to boost overall economic growth has resulted in several encouraging developments for the property market, such as the much-anticipated decision to allow the creation of a real estate investment fund (REIF). This will pave the way for investments in larger scale real estate projects at significantly lower price points and with far greater liquidity, in comparison to more traditional real estate investment.

Cluttons expects the short to medium term residential rental demand to be impacted by the Ministry of Manpower’s decision to temporarily ban the issuance of work permits to expats in key sectors. However, with continuing gains in oil prices and tourism, the economy will keep being driven upwards, ultimately boosting the residential market, particularly in terms of overall requirements.

Elsewhere, office rents remain level, with average headline rents holding steady in the city’s key submarkets during the first quarter of 2018. However, even in a market that has faced uncertainties and setbacks in the form of a demand slump following the shock oil price rout four years ago, there are consistent occupiers who are drawn to high-quality buildings and are committed to upgrading space.

For further details on Muscat’s office, residential and hospitality sectors, along with Cluttons' latest forecasts, view the full report here.